@thendric1956
I don't see your return as I don't work for TT. It disallowed your IRA so not to give you a deduction for investing in an IRA..... there is no add back, just no deduction of income.
Example AGI say is $300k, your IRA deductions is $0. 6% penalty if you don't withdraw the funds every year.
If your income had been $150k and you were eligible, your taxable AGI would have dropped to $142,500
Just make sure to withdraw the funds and any earnings so you dont continue to be charged the 6% fee annually. Here was steps you needed to do:
To enter the nondeductible contribution to the traditional IRA:
- Open your return
- Click “Deductions &Credits” on the top
- Click "I'll choose what to work on"
- Scroll down to “Traditional and Roth IRA Contributions” and click “Start”
- Select “traditional IRA”
- Answer “No” to “Is This a Repayment of a Retirement Distribution?”
- Enter the amount you contributed
- Answer “No” to the recharacterized question on the “Did You Change Your Mind?” screen
- Answer the next questions until you get to “Any Nondeductible Contributions to Your IRA?” and select “Yes” if you had nondeductible contributions before this tax year
- Enter your basis in the Traditional IRA from your 2022 Form 8606 line 14 (if you had a basis in the prior year)
- On the “Choose Not to Deduct IRA Contributions” screen choose “Yes, make part of my IRA contribution nondeductible” and enter the amount (if you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a warning and then a screen saying $0 is deductible).
To enter the 1099-Rs for the return of excess contribution and the conversion:
- Click "Federal Taxes" on the top and select "Wages & Income"
- Click "I'll choose what to work on"
- Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)"
- Answer "Yes" to the question "Did You Have Any of These Types of Income?"
- Click "I'll Type it Myself"
- Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc."
- Click "Continue" and enter the Form 1099-R for the returned Roth IRA contribution
- On the "Your 1099-R Entries" screen click "Add Another 1099-R" and enter the Form 1099-R for the conversion
- Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account”
- Then choose “I did a combination of rolling over, converting, or cashing out money.” and enter the amount next to "Amount converted to a Roth IRA account"
- On the "Your 1099-R Entries" screen click "continue"
- Answer "yes" to "Any nondeductible Contribution to your IRA?" if you had any nondeductible contributions in prior years.
- Answer the questions about the basis from line 14 of your 2022 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs
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As this is a public board, you need to contact tt directly if that is not what happened: contact TT at (800) 446-8848.
**I don't work for TT. Just trying to help. All the best.
***Say "Thanks" by marking as BEST ANSWER and clicking the thumb icon in a post and that I solved your question
**Mark the post that answers your question by clicking on "Mark as Best Answer" I am NOT an expert and you should confirm with a tax expert.
